An evaluation of policy options for reducing greenhouse gas emissions in the transport sector: The cost-effectiveness of regulations versus emissions pricing

Randall Wigle Nicholas Rivers ()
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Randall Wigle Nicholas Rivers: Wilfrid Laurier University
Authors registered in the RePEc Author Service: Randall M. Wigle and Nicholas Rivers

LCERPA Working Papers from Laurier Centre for Economic Research and Policy Analysis

Abstract: The reduction of greenhouse gas emissions from road transport is a key policy goal that is being pursued by both federal and provincial governments using a range of policies. This paper considers the cost of alternative approaches to reducing emissions from road passenger travel in Canada. Our findings reinforce the widely-held belief that a revenue-neutral carbon tax is the most cost-effective tool to reduce greenhouse gas emissions. Regulatory instruments on their own, such as a low carbon fuel standard, vehicle greenhouse gas intensity regulation, or zero emission vehicle mandate, achieve a given reduction at much higher cost. We show, however, that a combination of regulatory instruments can better approach the cost-effectiveness of a carbon tax than individual regulations. We provide insight about the optimal combination of regulatory instruments in the Canadian context, and find that both a low carbon fuel standard and an zero emission vehicle mandate can be jointly used to reduce GHG emissions from the transport sector. Our analysis is timely, given the rapidly evolving policies in this sector.

Keywords: Greenhouse gas emissions; low carbon fuel standard; electric vehicles; carbon tax; road transport (search for similar items in EconPapers)
Date: 2018-01-01, Revised 2018-01-01
New Economics Papers: this item is included in nep-ene, nep-env, nep-reg and nep-tre
Note: LCERPA Working Paper No. 2018-1, January 2018
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Citations: View citations in EconPapers (4)

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